The public sector is wasting £15bn a year on badly organised procurement and £10bn on shared services and outsourcing, the Institute of Directors has revealed.

The Institute of Directors has reported today that the government could save £25bn a year by 2013 if it overhauls its methods of procurement. The report provides suggestions for how they could do this by encouraging bodies to work more closely together rather than procuring services separately.

UK public sector procurement spend is £220bn a year, making it one third of the total government expenditure.

The IoD said there should be central buying organisations to handle key supplier relationships and major contracts on behalf of the whole public sector, which should be led by the Office of Government Commerce.

Miles Templeman, director general of the IoD, said: “The economic situation demands immediate action to reduce public expenditure through implementing the proposals in this paper. There is a lot of talk among politicians about the need to introduce efficiencies into the public sector, but very little detail on how this will be done.”

To read its full recommendations click here: Public Procurement Reform

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